I have long been a devoted “Trekkie”; not so much regarding the original series – although I have a great deal of respect for it – but two of the four television “sequels.” I could never get in to Deep Space Nine or the lesser known, and newest of the four – Enterprise. However, I rank The Next Generation and Voyager as two of the best written, acted, and produced shows I have ever watched; and to this day, watch reruns despite having seen each episode multiple times. And that’s a LOT of episodes, as “TNG” filmed 176, and Voyager 168!
Regarding the latter, I always thought its name was simply made up to reflect the show’s theme; i.e., a voyage to space’s outer reaches. However, given the typical brilliance of Star Trek writers, I should have known better; and only today did I realize the title’s genesis. Sure, I should have remembered the NASA satellite Voyager I being launched in 1977; and certainly when it flew by Jupiter, Saturn, Uranus, and Neptune in 1979, 1980, 1986, and 1989, respectively. It never met up with Pluto, but remember that at the time, Pluto was NOT the most distant planet (heck, it’s not even categorized as a planet anymore). Anyhow, Pluto’s orbit crosses with Neptune’s for 20 out of every 248 years – and in the 1990s when Voyager I was in the vicinity, such was the case. And thus, demonstrating just how vast the galaxy is; it took Voyager 24 years from passing Neptune to reaching the edge of the Milky Way itself; i.e., “interstellar space.” And thus, eleven billion miles from its launch point, it has truly gone boldly “where no man has gone before.”
Why do I bring this up, you ask? Because essentially ALL reasons has left the cancer-stricken global economy; replaced by the PROPAGANDA supporting financial markets underpinned solely by MONEY PRINTING and MANIPULATION. In other words, ALL I learned in earning my Finance degree and CFA designation – not to mention, 24 years of Wall Street experience – is now moot; i.e., as “out of this world” as the death throes of a 42-year made fiat currency experiment.
At the moment, “news” no longer matters; and frankly, neither does the Fed’s “tapering” decision next week. Even MSM lackey Reuters can’t figure out what the heck the FOMC is doing; i.e., discussing (miniscule) reductions in bond monetization amidst an environment of surging yields, weak economic data, and an unemployment rate not only well above the Fed’s stated 6.5% ‘tapering threshold,’ but grotesquely overstated due to the plunging Labor Participation rate and other structural weaknesses. Not to mention, the gaping disconnect between surging “waiters and bartenders” jobs and plunging restaurant sales; which in my view, is due to the explosion of part-time hiring as businesses reduce full-time, benefits-eligible employees ahead of Obamacare’s full implementation.
And how about this morning’s “trifecta of doom”; as retail sales were dramatically below expectations – just three days from Wednesday’s FOMC meeting; annualized inflation was nearly 4% above expectations; and the Consumer Sentiment plunge was the worst on record? And the result, of course: higher stock and Treasury prices – and continuing capping of Precious Metals following an already ridiculous two-week smack-down! Yes, logic has left the universe – at least from a reporting standpoint. However, “Economic Mother Nature” is still here; and given that PHYSICAL gold and silver demand are experiencing historic demand – whilst production is already freefalling – you can “bank on” fundamentals eventually winning the day; just as they ALWAYS do!
As for today’s topic, I’m not even close to done. Yes, logic has “left the building”; but that alone is not worthy of a dedicated article. What is, however, is the giant sucking sound from the East becoming more audible with each passing day; i.e., the MASSIVE flow of gold from the Western Hemisphere to the East. Whether legally – via Chinese imports, for example; or illegally, amidst exploding Indian smuggling; the gold is making Western vaults look like sieves – en route to its new, PERMANENT homes in the East.
The Chinese demand numbers are simply “otherworldly”; as combining imports from Hong Kong and estimated domestic production – ALL of which is purchased by the government – China is purchasing up to 80% of ALL global production. And those numbers, of course, ignore the fact that gold entering the country in cities other than Hong Kong are not even reported. In India, the recent import tariffs and restrictions have catalyzed record smuggling, while the Shanghai Exchange has seen a literal explosion in physical deliveries. Keep in mind, the below chart only contains 2013 data through July; and thus, it is entirely possible Chinese imports will end up more than double the 2012 level. Now do you understand why the TPTB work so hard to suppress the PAPER PM market; and more importantly, why they’re doomed to fail?
Equally incredible is the route such exports are taking; as per the above “sucking sound” article, and this one from Mike Krieger, the amount of gold exports from London to Switzerland is at least ten times faster than in 2012 – as you might expect, at RECORD levels. This gold is undoubtedly being sent to Swiss refiners – which cumulatively, process roughly 70% of the world’s doer into bars and coins. And given that roughly 80% of global gold production is being exported to (or kept within) China, clearly the refiners are being asked to recast 400 ounce “London Good Delivery” bars into denominations more commonly used in Asia. I reported on such MASSIVE Chinese retail demand when I traveled to Guangzhou last month; and trust me, it’s for REAL!
Reliable LBMA inventory data is difficult to find, but COMEX “registered” gold could literally disappear any day now; per the alarming chart below, depicting a 77% plunge since the April 12th-15th “ALTERNATIVE CURRENCIES DESTRUCTION; not to mention, the 32% YTD decline in the GLD ETF’s inventory – assuming it even exists – compared to just a 20% price decline…
Perhaps the space comparison is a bit hokey; but the fact remains that the aforementioned trends – of soaring gold demand, exploding Eastern imports, hemorrhaging Western inventories, and of course, the West’s “temporary insanity” as regards its analysis of such – are dramatically strengthening each day. At the current rate, COMEX registered inventories will be gone by early next year; whilst GLD’s remaining credibility of is on the verge of disappearing, now that it is denying holders their contractual right to redeem shares for PHYSICAL bullion.
If you believe “Economic Mother Nature” can be defeated by the forces of MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA, you’re welcome to “press your luck” with the diseased PAPER money system – despite the gaping, expanding leaks it’s experiencing each day. But I must warn you, she has never lost to such petty, short-range weapons; and given how much self-inflicted damage they have already incurred, the odds of losing her undefeated status are “slim to none.” I’ll continue to sleep the “SLEEP OF THE JUST” knowing my assets are protected with REAL MONEY. Will you?